October’s Mortgage Credit Availability Index shows a
slight relaxation in lending standards — but as most North Las Vegas
home buyers and sellers will agree, getting a mortgage is still
difficult. With mortgage availability benchmarked at 100, although it’s
currently at 111 ½, compared with the
800 it stood at in 2007, today’s is still a tough environment.
That’s why seller financing is being considered by more
homeowners. When a home is owned outright, seller financing can draw a higher
selling price (with future interest payments as a bonus). But before making
such an offer, North Las Vegas homeowners need to
consider all of the ramifications: there is more involved than just the
assumption of added risk.
Of course,
ordering and examining a buyer’s credit report is the starting point. If the
story it tells needs too many explanations, it’s time to walk away. Foreclosing
on a seller-financed home can be more difficult than through a traditional
foreclosure —particularly if the financing documents are substandard.
At first
blush, seller financing might seem to simplify the
whole transaction, but in fact some details usually handled by a bank must be
hammered out:
·
Who will pay for the appraisal; who for the inspection?
·
Who is going to be responsible for property
taxes and upkeep?
·
Will the deed be transferred to the buyer right
away, or only after the home is paid off?
Those issues
point out why a “handshake deal” can’t be recommended for a seller financing arrangement. Just consider
the last two points: if the deed hasn’t been transferred and taxes are in
arrears, whose credit is harmed?
A good attorney will draft an agreement that nails down
responsibilities and penalties for a buyer default as well as a detailed
payment structure. A well-drafted seller financing agreement protects both
parties by preventing misunderstandings and providing an unambiguous inducement
for good behavior.
Given the
right buyer, clear communicating and a framework cemented by the proper
paperwork, North Las Vegas seller financing can provide
the missing element that makes a sale possible. If you will be listing your own North Las Vegas home this fall, when you give me a call, we can discuss many of the
different paths to success.
Andrea Gonzalez- VIP Realty Group/call or text 4857887.
Andrea Gonzalez- VIP Realty Group/call or text 4857887.
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